Daily Overview of Global Markets & the SEE Region (Monday, April 27, 2015)

GLOBAL MARKETS: Renewed concerns that the US economy will probably struggle to rebound from the Q1 soft patch following Friday’s weaker-than-expected US March capital goods orders, weighed on the USD. Yet, with the monetary policy divergence theme continuing to have an impact on market sentiment towards the US currency, losses were limited. Looking at this week’s global calendar, market focus is on the FOMC’s two-day policy meeting which commences on Tuesday , the first estimate of US Q1 GP due on Wednesday as well as the BoJ’s monetary policy meeting and Eurozone’s April inflation data, both scheduled for Thursday.

GREECE: Speaking in the press conference that followed the April 24 Eurogroup, President Jeroen Dijsselbloem acknowledged that some progress has been made in official discussions between the Greek authorities and the Institutions over the past few weeks. Yet, he added that a divergence of views still exists on a number of issues noting that further progress is needed before the Institutions approve a comprehensive package of reforms. According to some press reports, the Brussels Group will convene later today while another meeting will follow on Wednesday with the Greek government aiming for an agreement to be reached by early May, ahead of the next Eurogroup scheduled for May 11.

CYPRUS: Fitch Ratings affirmed late on Friday Cyprus’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘B-‘ with a Positive Outlook. Eurogroup President Jeroen Dijsselbloem said that euro area finance ministers welcomed the recent parliamentary endorsement of the insolvency framework in Cyprus, which brings the country’s economic reform program back on track and paves the way for a return of the Institutions to Nicosia to carry out the next review.

SOUTH EASTERN EUROPE

BULGARIA: The persistently low trade volumes in the local stock market and in the absence of fresh triggers pushed domestic indices lower on a weekly basis on Friday.

SERBIA: The EUR/RSD closed little changed on the week, with NBS intervention in the FX markets to support the dinar offsetting dinar depreciation pressures after a disappointing 3-year T-bond auction.

CESEE MARKETS: Taking their cue from the broadly positive trend in global stock markets, the majority of emerging stock markets closed higher on Friday on the prevailing market perception that the Fed is in no rush to embark on a rate-tightening cycle and optimism about further economic stimulus measures by Chinese authorities. CESEE currencies closedlittle changed on the week.